The topic of money in politics has received a lot of attention over the past year. Between the issues raised by Occupy movement and the impacts of the Supreme Court’s Citizens United decision that we are witnessing in the Presidential race, many of us have become increasingly alarmed by the influence of money in politics. I myself have been wondering about the role of money in Seattle’s elections, and so I was eager to see the Seattle Ethics and Elections Commission take up a question about our own campaign finance laws in their regular monthly meeting yesterday afternoon.

The Seattle Ethics and Elections Commission (SEEC) considered a question about campaign finance that had to do with contribution limits and how incumbents use surplus funds from one campaign for another campaign. One of my staff members attended to fill me in on the discussion.

Warning: this post is a bit long, but necessarily so because it tackles interesting questions about our campaign finance laws. I urge you to stick it out, think it over and let me know what you think.

The current contribution limit for City races is $700. In December 2011, a local political consultant asked the SEEC to clarify its rule about how contribution limits apply when an incumbent city officials run for a different city office (e.g., a sitting City Attorney runs for City Council).

Here are two examples to help clarify the specific questions raised, as well as what the SEEC decided.

Let’s say“Martha Washington” is the City Attorney but Martha wants to run for City Council. Martha has $20,000 surplus from her last City Attorney race that she would like to roll-over into her City Council race.

There is a donor – let’s call him George – who contributed $500 to the Martha’s race for City Attorney.

George’s $500 donation was among the last $20,000 Martha raised and now has left over as surplus in her campaign account.

State and City law say that the candidate may transfer those funds to the race for a new office, only if she receives permission from the donor. We call using surplus funds from one race for another race a roll-over.

George, being a big fan of Martha, approves his contribution for Martha to use in her new race for City Council. The question in front of the SEEC yesterday was about how contribution limits apply.

Since Martha or any candidate can only raise $700 from a single donor, the question is: could George donate $200 more to Martha’s race for City Council (making the roll-over counts towards the limit for this election cycle), or could he donate up to $700 more?

The SEEC staff currently interprets the law and Rule 11 of the Administrative Code in such a way that George’s $500 donation counts toward his individual contribution limit in Martha’s new race for City Council. So, George may only give $200 more to Martha’s race for Council. The SEEC confirmed that interpretation of the law yesterday, meaning there is no change in that scenario of one office holder rolling over money to a campaign for a new office.

Still following along? Good, because there is another scenario where the SEEC did in fact make a change.

Let’s turn to the case of “Councilmember Abigail Adams.” Abigail also has $20,000 surplus funds that she wants to roll over to her re-election campaign for City Council.

Let’s say one of Abigail’s big supporters, “John,” donated $500 to Abigail’s first Council race. And just like the previous scenario, that $500 is part of Abigail’s last $20,000 raised and therefore included in her surplus or roll-over funds.

Neither State nor City law requires she contact John for permission to roll these funds forward since it is the same person running for the same office.

But, do the contribution limits apply? Can John give the Councilmember Adams $200 or $700 towards her re-election campaign?

Historically, this was treated differently than the previous scenario because the candidate is running for the same office instead of a different office.

Yesterday, the SEEC asked for a revision to Rule 11 to clarify that contribution limits should apply in the same way to the incumbent as they do to the challenger changing offices. That is, John could only contribute $200 more to Councilmember Adams’ re-election effort. This marks a shift in the existing interpretation of the law.

Here is where things get really interesting.

After this discussion to clarify the interpretation of existing law, the Commission took a few minutes to discuss what they would do if they had a blank slate. They asked: should incumbents be allowed to roll-over any surplus funds at all? On what grounds would we restrict them?

The question seems to be ripe because a finding in the SEEC 2011 Election Report showed that “transfers from prior campaigns reached a new high, as did the amount of unspent funds remaining at the end of campaigns.” In 2011, $187,016 in surplus funds was transferred from prior campaigns and $371,961 in candidates’ funds remains in surplus after the election.

The Ethics and Election Commissioners focused their conversation on the “donor intent.” If George gives $500 to Martha running for City Attorney, we expect his intent was to support speech and activities in favor of that candidate, for that office, at that time.

SEEC Staff shared examples from other states that have rules governing the amount of surplus funds that can be rolled forward in order to encourage candidates to honor the donor’s intent. For example, in Alaska a candidate can roll-over $5,000 in a municipal race – and slightly more for state offices. By restricting rollovers, the law encourages candidates to spend their funds in the races for which they were solicited.

Our current State and City laws requiring someone like Martha, who holds one city office and wants to run for another city office, to ask her donors for permission to transfer funds from one race to the next is one way that we support this intent here in Washington.

The question remaining is – should we be doing more? Should the City of Seattle restrict the roll-over of surplus funds? We could either eliminate them (say you can’t roll over any funds) or place a cap (like Alaska).

The SEEC indicated they would first focus their attention at the amendment to Rule 11, clarifying existing law, and then later determine if there was interest in picking up this broader question of roll-overs.

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